SOURCE: EVCI Career Colleges Holding Corp.

November 23, 2005 07:30 ET

EVCI Career Colleges Files 10-Q for Third Quarter 2005

Schedules Conference Call for Monday, November 28, 2005 at 1 PM ET

YONKERS, NY -- (MARKET WIRE) -- November 23, 2005 -- EVCI Career Colleges Holding Corp. (NASDAQ: EVCI) today announced results and the filing of its 10-Q for the third quarter of 2005.

For the quarter ended September 30, 2005, EVCI reported total revenue of $10.1 million, compared to total revenue of $6.5 million in the same period last year. For the third quarter, loss from operations was ($1.6) million versus a loss from operations of ($1.3) million in the prior year period. Net loss for the third quarter was ($1.5) million, or ($0.12) per diluted share versus a net loss of ($1.2) million or ($0.10) per diluted share in the year-earlier period.

For the nine months ended September 30, 2005, EVCI reported total revenue of $30.0 million, compared to total revenue of $20.8 million in the same period last year. For the nine months, loss from operations was ($0.2) million versus income from operations of $0.5 million in the prior year period. Net loss for the nine months was ($0.5) million, or ($0.04) per diluted share versus net income of $0.3 million or $0.03 per diluted share in the year-earlier period.

Dr. John J. McGrath, EVCI's Chief Executive Officer and President, commented, "We are very pleased to be able to normalize our public disclosures by filing our 10-Q and holding a conference call. In addition to information explaining our results for the three and nine months ended September 30, 2005, we have provided additional details regarding the results of the internal investigation. We have also included information regarding our response to the remainder of the New York State Education Department's draft compliance review report."

Dr. McGrath concluded, "I am very grateful to our stockholders and others who follow EVCI for their patience and understanding of EVCI's situation over the past month."

EVCI Career Colleges has scheduled a conference call to discuss its third quarter financial results at 1:00 p.m. ET on Monday, November 28, 2005. Those wishing to listen to the conference call by telephone may dial 1-800-922-0755 or 973-935-2406 for international callers. Please call approximately ten minutes prior to the scheduled conference call time. EVCI will also have a recording of the conference call available for replay on Monday, November 28, 2005 - Monday, December 5, 2005. The phone number for the replay is 877-519-4471 or 973-341-3080 for international callers. The pin number for the replay is 6760789.

About EVCI Career Colleges Holding Corp.:

EVCI is the holding company for Interboro Institute, Technical Career Institutes, Inc. (TCI) and the Pennsylvania School of Business (PSB).

Acquired in January 2000, Interboro offers degree programs leading to the Associate in Occupational Studies degree and Associate in Applied Sciences degree. It has a main campus in mid-town Manhattan and an extension center in each of Flushing, New York and in the Washington Heights section of Manhattan, New York. Interboro also has a college site in Yonkers, New York. Interboro is accredited by the New York State Board of Regents.

Acquired in September 2005, TCI offers two-year associate degree and certificate programs. With an emphasis on technology, TCI offers programs within three major divisions: Business and New Media Technology; Computer and Electronics Technology; Climate Control Technology. Its main campus is on 31st street diagonally across from Penn Station, and is supported by a nearby annex facility. TCI is accredited by the New York State Board of Regents and was recently awarded regional accreditation by the Middle States Commission on Higher Education.

Acquired in January 2005, PSB is authorized to offer two Associate in Specialized Business degree programs and two diploma programs in information technology as well as three recently authorized business diploma programs. PSB recently relocated to downtown Allentown, Pennsylvania and is offering programs there.

        EVCI Career Colleges Holding Corp. and Subsidiaries
                   Consolidated Balance Sheet


                                           September 30,     December 31,
                                               2005              2004
                                            (unaudited)       (audited)
                                           ------------      ------------
ASSETS

Current assets:
  Cash and cash equivalents                $  9,893,392      $ 10,504,308
  Student accounts receivable,
   less allowance for doubtful
   accounts of $3,198,000 and
   $105,000, respectively                    25,045,636         6,015,719
  Prepaid expenses and
   other current assets                       1,188,620           137,410
                                           ------------      ------------

      Total current assets                   36,127,648        16,657,437

Property and Equipment - net                  6,924,523         4,733,185
Intangible assets                            13,051,210                 -
Goodwill                                      5,061,934         3,914,624
Deferred income tax asset,
 net of valuation allowance
 of $1,827,500                                5,557,500         5,557,500
Other assets                                  3,207,852           475,226
                                           ------------      ------------
      Total Assets                         $ 69,930,667      $ 31,337,972
                                           ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued expenses    $  5,538,231      $  3,046,707
  Income taxes payable                                -           329,729
  Revolving credit line                       2,000,000                 -
  Deferred tuition revenue                   23,336,566         1,834,510
  Current portion of capital
   lease obligation                             308,267           275,329
  Current portion of notes payable            2,000,000           318,907
                                           ------------      ------------

      Total current liabilities              33,183,064         5,805,182

Capital lease obligation,
 net of current portion                         544,322           585,337

Notes payable, net of current portion        11,000,000           286,518

Deferred rent                                   807,846           766,710
                                           ------------      ------------

      Total liabilities                      45,535,232         7,443,747
                                           ------------      ------------

Stockholders' Equity:
  Preferred stock - $.0001 par value;
   authorized 1,000,000 shares: none
   issued and outstanding                             -                 -
  Common stock - $.0001 par value;
   authorized 20,000,000 shares;
   issued and outstanding 12,595,999
   and 12,329,603 shares, respectively            1,264             1,254
  Additional paid-in capital                 51,929,328        49,922,445
  Deferred compensation                      (1,000,000)                -
  Accumulated deficit                       (26,535,157)      (26,029,474)
                                           ------------      ------------

      Stockholders' equity                   24,395,435        23,894,225
                                           ------------      ------------
      Total Liabilities and
       Stockholders' Equity                $ 69,930,667      $ 31,337,972
                                           ============      ============

See Notes to Consolidated Financial Statements


        EVCI Career Colleges Holding Corp. and Subsidiaries
                Consolidated Statment of Operations
                          (unaudited)


                           Three months ended         Nine months ended
                               September 30,             September 30,
                            2005         2004         2005         2004
                        -----------  -----------  -----------  -----------
Net revenue             $ 9,962,420  $ 6,445,519  $29,702,668  $20,626,605
Other income                137,485       63,952      247,462      204,282

                        -----------  -----------  -----------  -----------
Total revenue            10,099,905    6,509,471   29,950,130   20,830,887
                        -----------  -----------  -----------  -----------

Operating expenses:
   Cost of revenue        3,553,572    2,012,841    9,334,351    5,521,691
   Selling, general and
    administrative        8,124,036    5,827,942   20,830,463   14,771,217

                        -----------  -----------  -----------  -----------
Total operating expenses 11,677,608    7,840,783   30,164,814   20,292,908
                        -----------  -----------  -----------  -----------

Income/(Loss) from
 operations              (1,577,703)  (1,331,312)    (214,684)     537,979

Other income (expense):
   Interest and
    financing costs         (66,027)     (34,166)    (169,680)    (150,572)
   Interest income           30,931       15,944       78,681       47,876

                        -----------  -----------  -----------  -----------

Income/ (Loss) before
 provision for income
 taxes                   (1,612,799)  (1,349,534)    (305,683)     435,283

Provision/ (Benefit)
 for income taxes          (120,000)    (170,000)     200,000      105,000

                        -----------  -----------  -----------  -----------
Net income/ (Loss)       (1,492,799)  (1,179,534)    (505,683)     330,283
                        ===========  ===========  ===========  ===========

Net income/ (Loss) per
 common share:
   Basic:               $     (0.12) $     (0.10) $     (0.04) $      0.03
                        ===========  ===========  ===========  ===========

   Diluted:             $     (0.12) $     (0.10) $     (0.04) $      0.03
                        ===========  ===========  ===========  ===========

Weighted-average number
 of common shares
 outstanding:
   Basic                 12,432,867   12,208,645    12,412,218  11,768,668
                        ===========  ===========  ===========  ===========
   Diluted               12,432,867   12,208,645    12,412,218  12,446,452
                        ===========  ===========  ===========  ===========

See Notes to Consolidated Financial Statements


              EVCI Career Colleges Holding Corp. and Subsidiaries
                    Consolidated Statement of Cash Flows
                                 (unaudited)

                                          Nine months ended September  30,
                                                2005              2004
                                           ------------      ------------

Cash flows from operating activities:
Net income/ (loss)                         $   (505,684)     $    330,283
Adjustments to reconcile net income/
 (loss) to net cash provided by
  operating activities:
   Depreciation and amortization              1,403,521           633,220
   Bad debt expense                             300,000                 -
   Non cash compensation expense                302,976           213,984
Changes in operating assets and
 liabilities; net of effects
 of acquisition:
   Increase in students
    accounts receivable                      (5,012,805)      (12,528,709)
   Increase in prepaid expenses and
    other current assets                        (47,289)         (164,210)
   Increase in other assets                     (35,992)                -
   Increase/(decrease) in accounts
    payable and accrued expenses
    and income taxes payable                 (1,378,485)        1,571,269
   Increase in deferred tuition revenue       9,615,916        10,819,870
   Increase in deferred rent                     41,136           577,290
                                           ------------      ------------
     Net cash provided by
      operating activities                    4,683,294         1,452,997
                                           ------------      ------------

Cash flows from investing activities:
   Purchases of property and equipment       (2,417,652)       (1,726,851)
   Deposits required                         (1,042,940)         (289,758)
   Return of restricted
    certificates of deposit                           -           259,252
   Repayment of notes receivable                      -            67,500
   Payments on accrued purchase
    price payable                                     -        (2,815,383)
   Cash paid on acquisitions, net of
    cash received of $1,176,709             (15,552,922)                -
                                           ------------      ------------
     Net cash used in
      investing activities                  (19,013,514)       (4,505,240)
                                           ------------      ------------

Cash flows from financing activities:
   Principal payments on capital
    lease obligation                           (599,188)         (361,302)
   Principal payment on notes payable          (605,425)         (758,334)
   Proceeds from issuance of debt            15,000,000                 -
   Payment of deferred financing costs         (780,000)                -
   Proceeds from issuance of
    common stock                                      -         9,348,841
   Proceeds from exercise of
    options and warrants                        703,917           618,354

                                           ------------      ------------
     Net cash provided by
      financing activities                   13,719,304         8,847,559
                                           ------------      ------------

Net increase (decrease) in cash
 and cash equivalents                          (610,916)        5,795,316

Cash and cash equivalents at
 beginning of period                         10,504,308         2,522,107

                                           ------------      ------------
Cash and cash equivalents at
 end of period                             $  9,893,392      $  8,317,423
                                           ============      ============

     Supplemental disclosures of
      cash flow information:

Cash paid during the period for:
   Interest                                $    126,784      $    150,572
                                           ============      ============
   Income taxes                            $    135,501      $    384,801
                                           ============      ============

     Supplemental schedule of noncash
      investing and financing activities:

Capital lease obligations incurred in
 the acquisition of equipment              $    591,111      $  1,065,161
                                           ============      ============

The Company purchased all of the
 outstanding stock of Pennsylvania
 School of Business, Inc. and Technical
 Career Institutes, Inc. for an
 aggregate purchase price of $16,727,000.
 In conjunction with the acquisition,
 liabilities were assumed as follows:

   Fair value of assets acquired           $ 32,156,000                 -
   Cash paid for acquisitions              $ 16,730,000                 -
                                           ------------      ------------
   Liabilities assumed                     $ 15,426,000                 -
                                           ============      ============

See Notes to Consolidated Financial Statements

Contact Information

  • Dr. John J. McGrath, CEO
    Joseph J. Looney, CFO
    EVCI Career Colleges Holding Corp.
    914.623.0700

    Jeffrey Goldberger
    Marybeth Csaby
    KCSA Worldwide
    Email Contact
    Email Contact
    212.896.1249
    212.896.1236